Chesapeake Energy Corp. announced this morning a deal to sell off assets for $1 billion in the Eagle Ford and the Haynesville shales to Dallas-based Exco Resources.
“Today’s announcement brings our year-to-date asset sales signed or closed to approximately $3.6 billion, which, combined with forecasted net operating cash flow, enables Chesapeake to fully fund its 2013 capital expenditure budget,” CEO Doug Lawler said in a statement. “Additional asset sales contemplated for later this year may reduce long-term debt and further enhance our financial liquidity.”
In the northern Eagle Ford Shale, will acquire about 55,000 net acres in Zavala, Dimmit, La Salle and Frio counties, Texas. The properties contain 120 producing wells that had average net daily production of 6,100 barrels of oil equivalent during May.
In the Haynesville Shale, Exco will get Chesapeake’s operated and non-operated interests in 9,600 net acres in Desoto and Caddo parishes, Louisiana. Included in deal: 11 units operated by Chesapeake and 42 units operated by Exco.
The average net daily production from the Haynesville properties was about 114 million cubic feet of natural gas equivalent during May.
Jefferies & Co. served as financial advisor to Chesapeake for the deal.
Douglas H. Miller, Exco’s chairman and CEO, said in statement: “The Eagle Ford acquisition establishes our position in the high value oil core area of the Eagle Ford shale, and delivers immediate production and reserve additions, significant resource potential, and solid economic returns. The Haynesville acquisition adds to our leading core position and provides an expanded platform to apply our technical expertise, best-in-class drilling and completion focus, and project execution skills.”